Serrano v. Priest
Citation: 7 ELR 20795
No. No. L.A. 30398, 20 Cal. 3d 25, (Cal., 10/04/1977)
In 1976, this court ruled that the then-existing California public school financing system was invalid as a violation of state constitutional provisions guaranteeing equal protection of the laws and had to be brought into constitutional compliance within six years. Serrano v. Priest, 18 Cal. 3d 728. Plaintiffs moved for an award of reasonable attorney fees against defendants in their capacities as officials of the State of California. The trial court awarded a total of $800,000 to plaintiffs' attorneys on the basis of the private attorney general exception to the general rule against fee awards.
Defendants contend on appeal that the lower court erred in concluding an award should be made under the private attorney general theory, and that the amount granted was excessive in any event. They argue additionally that the award is improper because plaintiffs have incurred no obligation to pay for legal services provided without charge by organizations receiving public or tax-exempt charitable funding.
Plaintiffs contend the lower court erred in refusing to base the award on the common fund and substantial benefit exceptions as well as the private attorney general theory. They also argue that legal representation by organizations receiving public or other tax-exempt funding should have no effect upon their eligibility for the award.
Section 1021 of the California Code of Civil Procedure provides that "[e]xcept as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties." The "common fund" principle represents one judicially created exception to this general rule. This theory, which is grounded in the court's inherent equitable powers, holds that "one who expends attorneys' fees in winning a suit which creates a fund from which others derive benefits, may require those passive beneficiaries to bear a fair share of the litigation costs." Quinn v. State, 15 Cal. 3d 162 (1975). Here, however, plaintiffs' efforts have not created or preserved an identifiable "fund" of money out of which they seek to recover their attorney fees, and the "common fund" exception is therefore inapplicable.
The "substantial benefit" theory, another such exception to the general rule against fee awards, permits the awarding of fees when the litigant, proceeding in a representative capacity, obtains a decision resulting in the conferral of a "substantial benefit" of a pecuniary or non-pecuniary nature. D'Amico v. Board of Medical Examiners, 11 Cal. 3d 1, 25 (1974). This exception has been applied in cases involving governmental defendants. Card v. Community Redevelopment Agency, 61 Cal. App. 3d 570 (1976); Mandel v. Hodges, 54 Cal. App. 3d 596 (1976). In this case, however, concrete "benefits" can accrue to the state or its citizens only insofar as the legislature in implementing the court's decision chooses to bestow them. The award therefore cannot be based on this theory.
The "private attorney general" exception is designed to encourage suits effectuating strong state policies by awarding substantial attorney fees to those who successfully bring such suits and thereby bring about benefits to a broad class of citizens. In Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 5 ELR 20286 (1975), the United States Supreme Court held that awarding attorney fees on this theory, in the absence of express statutory authorization, did not lie within the equitable jurisdiction of the federal courts. The Court's conclusion rested on an 1853 court costs act, 28 U.S.C. §§ 1920, 1923, which bears little resemblance to the governing statute in this state, § 1021 of the Code of Civil Procedure. Moreover, the fashioning of equitable exceptions to this rule to be applied in california is a matter within the sole competence of the state courts. The Court in Alyeska also suggested that such awards in the absence of explicit statutory authorization would represent an unacceptable judicial intrusion into the domain of the legislature in determining the relative importance of the public policy involved in each case. No such problem is presented here, however, since plaintiffs have vindicated a constitutional rather than a statutory policy.
The court thus holds that the trial court acted within the scope of its equitable discretion in concluding that reasonable attorney fees should be awarded to plaintiffs' attorneys on the basis of the private attorney general theory where, as here, the litigation has vindicated a public policy having a constitutional basis. The court expressly declines to answer the question of whether such an award would be proper where a statutory rather than a constitutional policy was vindicated.
The court also rules that because in many cases the only attorneys equipped to present meritorious constitutional claims affecting large numbers of people are those in funded "public interest" law firms, a denial of benefits to such attorneys on the ground that they receive funding from charitable or public sources would be essentially inconsistent with the purpose of the private attorney general theory. And finally, the court remands the case for a determination of reasonable attorney fees for service performed by plaintiffs' attorneys on the appeal and addition of this amount to the judgment.
The full text of this decision is available from ELR (47 pp. $6.00, ELR Order No. C-1142).
Counsel for Plaintiffs-Appellants
Public Advocates, Inc.
433 Turk St., San Francisco CA 94102
John E. McDermott
Western Center on Law and Poverty
1709 W. 8th St., Los Angeles CA 90017
Counsel for State Defendants-Appellants
Thomas E. Warriner, Deputy Attorney General
555 Capitol Mall, Sacramento CA 95814
Sullivan, J.; Wright, Mosk, and Kaus, JJ., and Tobriner, Acting C.J. concur. Richardson and Clark, JJ. dissent in separate opinions.
[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]